Impact of Industrialization in India
Industrialization of a country means to include manufacturing industries apart from agricultural industries to develop the country. A country that is only based on agriculture cannot develop as much as an industrialized country can. In fact, both are the pillars that bear the responsibility of improving and maintaining a stable economy for the country. Though industrialization has its own disadvantages affecting the environment and health of the people without proper industrialization, the country remains underdeveloped. It provides all the necessary elements for strengthening the economy of the country with its technological progress. Industrialization in India started in 1854 with the first cotton mill in Bombay. Since then India has always moved forward in its industry setup and thus making it a developing country from an underdeveloped one.
The economy plays a significant role in the growth of every country across the world. It is the economy that determines and separates the developed country from the underdeveloped country. The economy of the developed nation depends mainly on the industrial sector while the underdeveloped countries’ economy mainly depends on the agricultural sector. To revive the economic status, industrialization plays an instrumental role in bringing the economical shift in numerous countries across the globe and the same shift occurred with industrialization in India.
History of industrialization in India
During the colonial period, India followed the non-industrial model as a developing country. However, a significant number of Indians took this model as a hindrance towards growth and they opined that only industrialization could maximize the economic growth of the country. After independence, India’s first Prime Minister Jawaharlal Nehru employed the tool of industrialization to eradicate poverty from the country.
With the introduction of industrialization, there was a significant amount of growth through the flow of internal and external economies that pushed the country towards self-sufficiency. Further, the government realized that the potential of exports and agriculture was limited and hence taxation occurred based on the terms of trade. Heavy industry of the country was given attention by emphasizing import substitution.
The introduction of industrialization in India could only be catalyzed through the implication of a centralized and planned economy. The administrative control occurred with the foundation of The Industries Act 1951 which focused on the development and regulation of the industry.
While there were numerous East Asian countries building strong private sectors through the intervention of the state, India during the same period was focusing on state regulation over important industries. In the mid-19th century, industrialization in India went through two major shifts which were rural electrification and activism of the state in subsiding new seeds and fertilizers.
By the end of 1970, India was self-sufficient in grains with the success of the green revolution. Some of the major changes that occurred during this period were regulation on prices, nationalized banks, trade restrictions and squeezing of the foreign investment.
In the late 19th Century, economic reforms were launched to promote a competitive economy. The promotion of a competitive economy opened the door for foreign investment and trade. There was also a considerable amount of reduction in the use of import licenses and tariffs that encouraged the idea of global integration. Such changes enabled import-export trade to carry out business operations without the requirement of permit or license.
Ownership Pattern and Role of Industry
The progress of industrialization since the year 1951 has been the most important feature of economic development in India. This could be understood through the commodity composition of India’s foreign trade.
On one hand, the import of manufactured goods has been greatly minimized while on the other hand, import of India’s engineering goods has been maximized. Industrialization also brought the growth of managerial and technical skills which increased the efficacy in operations. There are three categories of ownership patterns which are followed by every industry as per their objective. These three categories of ownership have been discussed below:
Corporate Sector - Various forms of corporate companies fall under this sector which is further subdivided into the public corporate sector and private corporate sector. In the public corporate sector, there are public corporations and governmental departmental enterprises. Whereas, in the private sector there are both public and private limited companies.
Non-Corporate Sector - This sector involves the industrial units i.e. the units in which the owners are either partners or sole proprietor and HUFs ( Hindu Undivided Families)
Others - These industries include village industries units like manufacturing of khadi, sugar mills and similar other industries as such.
Thus, it can be stated that the role of the industry since industrialization had a major impact on the Indian economy.
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FAQs on Industrialization in India: History and Impact
1. What are the phases of Industrial growth pattern in India?
India is a developing country and though its development is gradual and slow but this is consistent. Industrialization in India has been given importance since decades ago with a set of policies and programs. The entire pattern of industrial growth in India can be separated into four phases below:
The strongest phase of India’s industry setup was its first phase which was between 1951-65. This phase actually laid the foundation for the setup of industry in independent India.
India faced a setback in industrialization in the year 1965-80 and this is regarded as the second phase. The phase was actually the retrogressive phase in Indian Industrialization.
However, with lots of measures and policies, the Government of India recovered the deteriorated condition of Indian industry in the year 1981-91. This is the third phase of Indian industrialization.
The final and fourth stage which began after 1991 initially saw the worst setback of industrialization in India but within a year it was able to adjust to the setback and with a lot of reforms improved its industrialization. Since then ups and downs have continued in Indian industrialization.
2. What are the factors responsible for industrial slow down?
The factors that are responsible for industrial slow down are as follows:
4.6 per cent decline in the growth of export
Overestimation of the rate of demand growth
In the first phase of liberalization, there was a considerable build-up in regards to industrial capacity.
3. What are the main advantages of Industrialisation?
Industrialization is one of the most important paths to improve the economy of the country. It can improve the economic condition of the country by reviving the dead factories or trades. Technologically upbringing the country is possible only through industrialization. It generates a lot of employment in the country and as a result, the income of the whole community increases and the standard of living improves. Industrialization means the manufacture of more products and as a result, there is no scarcity of the products in the country and people of every stratum can afford the basic needs. Export quality also increases and brings enough revenue for the country. It improves our medical infrastructure and care.
4. What are the negative sides of industrialization?
In spite of the fact that without industrialization a country cannot strengthen its economy, the government has to take measures to save the environment and people from the negative impacts of industrialization. The disadvantages of industrialization are as follows:
The working conditions in an industry often result in the poor health of the workers. They are often faced with hazardous conditions as well.
Industrialization in India has employed child labor who are available at low cost. Though there are laws against it often that are neglected.
The environments around the industries deteriorate and often become unfit for residential purposes.
It created inequality in the financial condition of people since only a minimum percentage gets rich enough.
Global warming and climatic changes are the direct results of industrialization.
However, of all the disadvantages, the most negative impact that industrialization plays is on the world environment. Even huge amounts of trees have been destroyed for setting up industries.
5. What are the recent terms included in Indian Industrialization?
Industrialization is making progress in our country and there is a need for the inclusion of new terms to explain and understand the new face of industrialized India. Few such related terms are as follows:
GDP Growth Rate: Meaning gross domestic product growth rate. This rate gives an immediate idea about the improvement rate in the economy of the country.
Niti Aayog: A set of programs and policies set by the Government for the welfare of its people.
GII: Global Innovation Index which compares the countries and ranks them accordingly based on their success and capability in innovation.
Consumer Protection Act which ensures the consumers get all their demands fulfilled and in case of grievances get a right to complain.
Bill of entry is a set of legal procedures that an imported good has to pass through before it enters the country which is importing the goods.
6. What is the importance of this chapter in the school curriculum?
CBSE syllabus is designed in such a way as to give the students a holistic development and knowledge in all practical fields of life. It is extremely necessary for a citizen to know the status and economic condition of the country in which he/she lives. CBSE curriculum makes the students aware of the country’s economy and how it is developing or declining. It is important since the country’s future lies on their shoulders and so they need to prepare them for participating in such activities of developing the country from their youth days. The industrialization of India, its history, and its present is extremely important for them to know so that they can design the future accordingly and improve the industries in India.
